District protection no protection against termination due to urgent own use – dated September 17, 2019 – mr. AW Dolphin
On 10 September 2019, the Court of Appeal of The Hague, ECLI:NL:GHDHA:2019:2341, made a decision in the matter between Bram Ladage as franchisor and one of its franchisees. The question to the was in order, is whether the franchisor as lessor can execute the lease terminate due to urgent own use, while this own use, in the sentence of district protection, would be excluded under the franchise agreement.
The franchisor had terminated that lease due to urgent personal use, among other things because it wished to operate the business space itself again as a snack bar and that it would receive a profit from that exploitation. can achieve a better return than renting to the franchisee. The franchisor had drawn up an operating budget for this purpose. The court considers that, insofar as the franchisee would be entitled to a goodwill compensation (within the meaning of Article 7:308 of the Dutch Civil Code) at the end of the exploitation, the difference between the net profit of its own exploitation by the franchisor on the one hand and the rental income for the franchisor on the other, is so great that it is still plausible that a higher return can be achieved by the franchisor with its own operation.
The franchisee pointed out that in the franchise agreement was agreed that the franchisee has the exclusive entitled to use the Bram Ladage system in the business premises. According to the franchisee, this means that the franchisor as lessor has the cannot cancel the rent due to urgent own use, because this is exactly what own use with the territory protection in the franchise agreement is excluded. The after all, the franchise agreement will continue until 1 January 2023. Judged however, it is ruled by the court that the duration of the franchise agreement is not is relevant, as the franchise agreement does not entitle the continuation of the lease of the business space.
In this case, the term of a franchise agreement therefore offers no guarantee for the premature termination of the rental agreement by the franchisor on the grounds of urgent personal use, even if district exclusivity has been agreed in the franchise agreement.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice.
Do you want to respond? Go to dolphijn@ludwigvandam.nl
Other messages
Director’s liability of a franchisee after failing to rely on an unsound prognosis.
On 11 July 2017, the Court of Appeal of 's-Hertogenbosch made a decision on whether the franchisor could successfully sue the director of a BV for non-compliance with the
Liability accountant for prepared prognosis?
In a judgment of the Court of Appeal of 's-Hertogenbosch of 11 July 2017, ECLI:NL:GHSHE:2017:3153, it was discussed that franchisees accused the franchisor's accountant of being liable
How far does the bank’s duty of care extend?
Some time ago the question was raised in case law what the position of the bank is in the triangular relationship franchisor – bank – franchisee.
Burden of proof reversal in forecasting as misleading advertising?
In an interlocutory judgment of 15 June 2017, the District Court of Zeeland-West-Brabant, ECLI:NL:RBZWB:2017:3833, ruled on a claim for (among other things) suspension of the non-compete clause.
Fine for franchisor because aspiring franchisee is foreigner
On 5 July 2017, the Council of State, ECLI:NL:RVS:2017:1815, decided whether, in the case of (proposed) cooperation between a franchisor and a prospective franchisee, the franchisor
Article in Entrance: “Company name”
“I came up with a wonderful name for my catering company and incurred the necessary costs for this. Now there is another entrepreneur who is going to use almost the same one. Is that allowed?"